No business as usual yet with IOI Corp, says Nestle SA

PETALING JAYA: Nestlé SA, which has phased out all existing contracts with IOI Corp Bhd, will not be resuming its commercial relationship with the Malaysian group any time soon, citing insufficient evidence of improved environmental practices.

“We are continuing to engage IOI in a dialogue and look forward to learning more on the progress which the company is making. To date, we have not seen sufficient evidence of improvements,” a representative from Nestlé SA, the food giant’s head office in Vevey, Switzerland, told SunBiz in an email interview.

Nestlé said it has traceability systems in place and works with its partner organisation, The Forest Trust (TFT), which helped the group look into IOI’s response to the issues raised after the suspension of the Malaysian company’s Roundtable on Sustainable Palm Oil (RSPO) certification.

“Alongside TFT, we carried out an assessment of IOI’s action plan. Our conclusion was that it did not go far enough in tackling the issues raised and that as a consequence Nestlé will not award any new business to IOI group,” it said.

Nestlé said the lifting of IOI’s RSPO certification suspension is the first step towards rebuilding trust with its clients, including Nestlé, but it will not change its approach until IOI’s upgraded policies are enacted, with improvements verified on the ground by an independent group of experts.

“We will remain in dialogue with IOI Group during this time to ensure that the exchange of best practices and experiences continues,” it added.

According to the Nestlé representative, all suppliers must adhere to its non-negotiable Responsible Sourcing Guideline and Nestlé Supplier Code, which includes a number of provisions on environmental and other minimum requirements.

If any of its suppliers are found to be in violation of regulations, Nestlé will try, where possible, to engage and work with the suppliers to improve practices.

“Where there is consistent evidence of a lack of progress against our standards or an unwillingness to engage in remediation measures, we reserve the right to review and potentially terminate commercial relationships,” said the representative.

IOI was a Nestlé supplier for seven years before ties were cut following the RSPO suspension of IOI’s sustainability certification in April this year.

However, in August, RSPO lifted the suspension after its board of governors endorsed the recommendation made by the complaints panel on the issue. The committee said it was satisfied that IOI met the conditions set out in its letter to the company in March, based on the actions that IOI had taken and implemented since then.

Earlier this week, environmental consultant Aidenvironment threatened to withdraw its membership in RSPO if the green palm oil body does not come up with commitment to change. It also said the green palm oil body has made “serious mistakes” with the IOI case.